Extended Brexit transition required, including for ‘no deal’

Thursday, 20 December 2018Ibec, the group that represents Irish business, today noted the contingency plans for a ‘no deal’ Brexit published by the European Commission and Government, and urged them to work collectively to bring forward more meaningful measures to support business. The group said businesses needed more information on how a ‘no deal’ scenario would be managed on the ground. A comprehensive range of state aid supports would also be required to protect jobs and businesses that are the most exposed to ‘no deal’ risks.

Ibec Director of Policy and Public Affairs Fergal O’Brien said: “Reckless time-wasting by the UK government is now forcing businesses to activate costly ‘no deal’ contingency plans. A comprehensive Brexit deal has been agreed and signed off by the UK Cabinet. If the UK government is unable to ratify it, it should defer or cancel Brexit.

“Adjusting to a radically new trading relationship with the UK at the end of March is not possible and not realistic. Acute trade bottlenecks would be created overnight. Jobs and businesses would be immediately on the line. Companies are preparing insofar as they can, but the economy is simply not in a position to deal with such an unprecedented and profound shock. An extended transition period would be required, including in the case of ‘no deal’.”

Ibec has proposed a comprehensive set of measures that Government would need to introduce in the case of ‘no deal’, including:

· A new enterprise stabilisation fund, to provide short-term financing support for affected companies.

· Direct capital, marketing and innovation supports for companies reorienting into new markets beyond the UK.

· Allowing companies to claim VAT as an input credit, at the same time as declaring their liability, to minimise cash flow needs.

· New trade support measures, including further export trade financing and export credit guarantees.